Rising prices affect SE. Asia tourism

BANGKOK — With summer around the corner, soaring prices and other complications from the war in the Middle East are straining the tourism-dependent economies of countries in Southeast Asia, including Thailand and Vietnam.

The region's peak tourist summer season is at risk as elevated jet fuel costs, coupled with ceasefire uncertainties, prompt flight cancellations and higher ticket prices.

Some families are pulling back on travel as visiting gas stations and grocery stores gets more expensive worldwide. Crowds have thinned at some places once synonymous with travel.

"With gasoline prices rising and tourism declining, how can we make money?" asked Siv Pech, a 58-year-old tuk-tuk driver in Siem Reap, home to Cambodia's centuries-old Angkor Wat temple complex.

Tourism is an economic lifeline for many developing nations. It contributes nearly 13 percent of GDP in Thailand and nearly 9 percent in Vietnam, and it underpins millions of jobs in Cambodia. Travelers bring in much-needed foreign currency for import-dependent economies, such as the Philippines and Nepal.

Those tourism dollars are more critical than ever as war-driven spikes in oil prices push up the cost of fuel imports, especially for parts of the world that relied on the Strait of Hormuz as a conduit for much of their oil and gas.

The war will determine which tourism businesses can survive long enough to benefit from the eventual return of travelers, said Jitsai Santaputra of The Lantau Group, an energy industry consulting firm.

"This, happening within five years of each other — first the pandemic and now the war — is horrible for the tourism industry," she said.

Jet fuel shortages and surging costs have led Vietnam Airlines, the Malaysia-based AirAsia Group, and other carriers to cut flights or readjust schedules.

European carriers face a squeeze from similar issues. Airspace closures across the Persian Gulf early in the war and the intermittent closures of certain Gulf airports cut off key layover locations for Asia-bound flights or forced commercial airplanes to take longer, costlier routes.

Squeezing drivers

On the ground, rising fuel costs in tourism-dependent Southeast Asia are squeezing taxi and ride-hailing app drivers.

Pech, the Cambodian tuk-tuk driver, said he used to earn up to $20 a day taking tourists around Siem Reap. That has plummeted to about $5 a day.

His gas bill eats half of that. The rest goes to food. "Some days, I don't earn even a cent," he said.

Tourism is vital for many regional economies, accounting for nearly 11 percent of economic activity in the Association of Southeast Asian Nations in 2019, according to the World Travel and Tourism Council.

An analysis by Moody's Analytics estimated that effects from the war would likely reduce economic growth across the Asia-Pacific region by 0.1 to 0.4 percentage points this year.

"The conflict will weigh on growth mainly through higher production costs and consumer prices, along with weaker external demand from trade and tourism," said Albert Park, chief economist at the Asian Development Bank.

Higher airfares and weaker travel confidence can quickly spill over into household livelihoods and public revenues in economies where visitor arrivals are a major source of jobs, income and foreign exchange, according to a recent report by the United Nations Development Programme.

In Cambodia, Sokha Sambo, owner of the Sambo Khmer & Thai Restaurant in Siem Reap, said the rising price of liquefied petroleum gas used for cooking has strained her budget, hindering her ability to dish out her signature green curries.

In the first four months of this year, the number of recorded international and domestic visitors to Siem Reap dropped by 37.5 percent compared with the same period last year, according to the province's tourism department.

"This has greatly affected all of us," Sambo said.

Agencies via Xinhua